Tech Giants Continue To Flex Muscles
It was just last week that the CEOs of the largest U.S. technology companies virtually testified before Congress. The CEOs of Amazon, Apple, Facebook and Google were questioned by lawmakers over worries they've gained too much power.
"Our founders would not bow before a king. Nor should we bow before the emperors of the online economy," Representative David N. Cicilline said.
"We compete hard. We compete fairly. We try to be the best," Facebook CEO Mark Zuckerberg said.
Despite technology giants being in the news over fears they've gotten too big, it hasn't slowed them down in the few days since.
Microsoft, which didn't have its CEO testify last week, is working on a deal to acquire TikTok's U.S. operations from Bytedance. Despite Microsoft being among the largest technology companies, the Trump administration is fine with TikTok being sold to a U.S. company.
"I don’t mind whether it’s Microsoft or someone else, a big company, a secure company, a very American company buys it," President Trump said yesterday. "It'll close down on September 15 unless Microsoft or somebody else is able to buy it and work out a deal, an appropriate deal, so the Treasury of the United States gets a lot of money."
Also yesterday, Google announced it will invest $450 million for a 6.6% stake in security company ADT. The deal will see ADT sell and install Google's Nest smart home devices as early as this year with plans for Nest to become ADT's main offering.
The news caused shares of ADT to close 56% higher on the day after being up by as much as nearly 100% earlier in the day.
The companies said they will "integrate Google’s hardware and services and ADT’s DIY and professionally installed smart home security solutions to innovate the residential and small business security industry."
"We’re excited to partner with ADT to further our mission of building helpful devices for the home," Nest GM Rishi Chandra said. "ADT is a leader in smart home security, and I look forward to working with the team to create innovative smart home security solutions that help everyone feel safe and protected."
While regulators in various parts of the world continue to investigate these technology companies, it doesn't appear that they have caused them to think twice about pursuing new deals.
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Eli Lily to test at nursing homes. Eli Lilly is beginning a late-stage trial on a potential COVID-19 antibody treatment to determine if it can stop the spread of the virus in nursing homes. The phase 3 trial, which is in partnership with Canadian biotech AbCellera, expects to enroll up to 2,400 patients who live or work in a nursing home and have recently been diagnosed with the coronavirus. "Covid-19 has had a devastating impact on nursing home residents," Eli Lilly chief scientific officer Daniel Skovronsky said. "We’re working as fast as we can to create medicines that might stop the spread of the virus to these vulnerable individuals."
Top CEOs write to lawmakers. More than 100 CEOs have signed a letter warning small businesses face "a wave of permanent closures" if aid is not provided to them by Labor Day. The letter, which was organized by former Starbucks CEO Howard Schultz, is addressed to the leaders of both parties of the House and Senate. "From retailers and restaurants to consulting firms and manufacturers, small business owners are facing a future of potential financial ruin that will make the nation’s current economic downturn last years longer than it must," the letter said. The letter says aid can show "how capitalism can benefit All Americans, particularly entrepreneurs who have been forced to shutter or reduce their capacity of their business through no fault of their own."
Add them to the list. Lord & Taylor, the oldest department store in the U.S., and Tailored Brands, the parent of Men's Wearhouse and Jos. A. Bank, both filed for Chapter 11 bankruptcy. The two mark the latest retail casualties of the coronavirus pandemic. Lord & Taylor said it will submit a reorganization plan with the court, while Tailored Brands said it has already entered into a restructuring agreement with more than 75% of its senior lenders. The two join the list of about two dozen retailers, including notables such as J. Crew, J.C. Penney and Neiman Marcus, that have filed for bankruptcy since the coronavirus began.
Another EV company is going public. Lordstown Motors will be the latest electric vehicle maker to go public via a merger with a blank-check company as the company has signed an agreement to merge with DiamondPeak Holdings. The deal, which is valued at $1.6 billion, will see Lordstown Motors trade on the Nasdaq under the ticker "RIDE." Lordstown Motors is going after the U.S. commercial fleet market as it is building an electric pickup truck slated to begin production in the second half of 2021.
Virgin Galactic teams up with Rolls-Royce. Virgin Galactic is partnering with Rolls-Royce to develop an aircraft for supersonic travel. Virgin Galactic has already completed a mission concept review of its design with NASA and will now work with the Federal Aviation Administration to get the supersonic aircraft certified for flight. Virgin Galactic's supersonic aircraft is designed to travel at Mach 3 speed and hold between 9 and 19 passengers. "We have made great progress so far, and we look forward to opening up a new frontier in high speed travel," Virgin Galactic chief space officer George Whitesides said.